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What is optimal output rule? Optimal output rule: According to the optimal output rule, describe that profit is maximized through producing the quantity of output at that th
Indifference curves In order to explain indifference curves, we will again make the simplifying assumption that the consumer buys two goods, x and y. The table below gives
Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is the difference between the earn
manual problems solution of demand theory
types of capital budgeting
Q. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr
Thinking about modifications in the model again: Go back to the original model again, but add a marginal propensity to invest, this is, suppose that I = f ( i and Y). The MPI is d
State the Traditional demand theory So an over-simplified and the most commonly stated demand function is: Dx = f (PX) thatconnotes that demand for commodity X is the function
Disadvantages The effect on incentives High progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk
assumptions and limitations
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